Bitcoin Spelling Bee 🐝

Peer-to-Peer (P2P): Peer-to-peer (P2P) computing or networking is a distributed application architecture that partitions tasks or workloads between peers. Peers are equally privileged, equipotent participants in the application. They are said to form a peer-to-peer network of nodes.

Decentralization: Decentralization is the process of redistributing or dispersing functions, powers, people or things away from a central location or authority.

Hashing: A hash function is any function that can be used to map data of arbitrary size to data of fixed size. The values returned by a hash function are called hash values, hash codes, digests, or simply hashes.

When money transfers occur as a bank wire transfer or ACH payment, or even transfers of money using services such as PayPal, the funds are sent electronically but the currency transmitted is representative money and what transfers is an underlying fiat currency.

Cryptography: Cryptography or cryptology is the practice and study of techniques for secure communication in the presence of third parties called adversaries.

Public Key Cryptography: Public key cryptography, or asymmetric cryptography, is any cryptographic system that uses pairs of keys: public keys which may be disseminated widely, and private keys which are known only to the owner. This accomplishes two functions: authentication, which is when the public key is used to verify that a holder of the paired private key sent the message, and encryption, whereby only the holder of the paired private key can decrypt the message encrypted with the public key.

Encryption: In cryptography, encryption is the process of encoding a message or information in such a way that only authorized parties can access it. Encryption does not of itself prevent interference, but denies the intelligible content to a would-be interceptor. In an encryption scheme, the intended information or message, referred to as plaintext, is encrypted using an encryption algorithm, generating ciphertext that can only be read if decrypted.

Algorithm: In mathematics and computer science, an algorithm is a self-contained sequence of actions to be performed. Algorithms can perform calculation, data processing and automated reasoning tasks.

Wallet: A digital wallet refers to an electronic device that allows an individual to make electronic transactions. This can include purchasing items on-line with a computer or using a smartphone to purchase something at a store.

Cold Storage: Cold storage in the context of Bitcoin refers to keeping a reserve of Bitcoins offline. This is often a necessary security precaution, especially dealing with large amounts of Bitcoin.

Hardware Wallet: A hardware wallet is a special type of bitcoin wallet which stores the user’s private keys in a secure hardware device.

They have major advantages over standard software wallets:

private keys are often stored in a protected area of a microcontroller, and cannot be transferred out of the device in plaintext
immune to computer viruses that steal from software wallets
can be used securely and interactively, as opposed to a paper wallet which must be imported to software at some point
much of the time, the software is open source, allowing a user to validate the entire operation of the device

Paper Wallet: In the most specific sense, a paper wallet is a document containing all of the data necessary to generate any number of Bitcoin private keys, forming a wallet of keys. However, people often use the term to mean any way of storing bitcoins offline as a physical document.Mining: Mining is the process of adding transaction records to Bitcoin’s public ledger of past transactions. This ledger of past transactions is called the block chain as it is a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place. Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.

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